Health and Safety (Offences) Bill

Lord Grocott: My Lords, I beg to move that this Bill be now read a second time.
	This is a Private Member's Bill from the other House on the subject of health and safety at work and it is a privilege for me to have been asked to present it. It goes without saying that I could not single-handedly have presented the material that I shall be giving to the House and I need to give out one or two words of thanks. The first goes to my right honourable and very good friend Keith Hill, who piloted the Bill through the Commons. He was lucky enough to win a ballot for a Private Member's Bill, which few of us were able to do. Secondly, I thank my noble and good friend Lord McKenzie of Luton who, as well as being the Minister who will be speaking later, is the lead Minister for health and safety at work. It is nice to have the lead Minister in our House. I also thank his officials and the staff at the Health and Safety Executive who did all the work. I hope I am not being premature in thanking the opposition parties. The Conservatives and the Liberal Democrats were very supportive in the Commons and I feel that may be the case today. There has almost always been all-party support for health and safety legislation.
	Let me begin with a word or two about the parent Act. One of the things I have enjoyed about this operation has been reading the speeches made during the passage of the Health and Safety at Work etc. Act 1974, which was introduced by that short Government between February and October 1974. Many positive contributions were made in the Commons at that time by people whose names may be familiar. I can call them by their real names as they were at the time. There were contributions from Jeff Rooker, Tom King and Giles Radice; and it would not be proper legislation without a supportive contribution from the noble Earl, Lord Ferrers, in this House. It has been a nice trip down memory lane. My only regret is that the people of Lichfield and Tamworth decided in February of that year not to send me to the House of Commons and so I was not able to do anything about it myself.
	In its 34 years, the Health and Safety at Work etc. Act has experienced minor amendments from time to time, and this Bill is one such amendment. The Act has been added to by many regulations but its substance—that is to say, the structures, duties, offences and the approach to safety in the workplace that it established—has remained intact and has stood the test of time. The standards of culture that it enshrines have been sustained by the Health and Safety Executive, a body of high national and international repute, and by the highly respected role played by environmental health officers who enforce health and safety in offices, shops and similar premises at local level.
	The record of the 1974 Act speaks for itself. Between 1974 and 2007, the number of fatal injuries to employees fell by 73 per cent; the number of reported non-fatal injuries fell by 70 per cent. Between 1974 and 2007, the rate of injuries per 100,000 employees fell by a huge 76 per cent, and Britain had the lowest rate of fatal injuries in the European Union in 2003, which is the most recent year for which figures are available. The EU average was 2.5 fatalities per 100,000 workers; the figure in the UK was 1.1.
	So what are the reasons for the Bill? Why is it necessary to increase the penalties as the Bill seeks to do? There are three principal reasons: first, to update the penalties so that, in simple, layman's terms, the penalties match the offence; secondly, to provide for more effective deterrence; and, thirdly, to establish greater efficiency in the dispensation of justice.
	On tougher penalties, there is a well-established view that the fines available under health and safety legislation are inadequate. As long ago as 1998, the Court of Appeal judged that the health and safety fines being imposed were too low. In the consultation leading up to the Government's publication of their strategy statement, Revitalising Health and Safety, in June 2000, the overwhelming view of consultees was that the general level of penalties imposed by the courts was inadequate. Only 7 per cent considered that the existing framework for penalties was satisfactory. In 2005, Philip Hampton, in his report for the Treasury on regulation and enforcement, noted that the existing maximum fine of £5,000 for a breach of a regulation was an insignificant sum for most businesses. The point was reiterated in 2006 by Professor Macrory in his regulatory justice report.
	On the option of imprisonment, there is a history going back to the mid-1990s of judges expressing discontent at being unable to impose jail sentences for the most severe health and safety offences. Examples include prosecutions involving illegally employing children to help with the removal of asbestos and the fabrication of test certificates for cranes where the offences were carried out with the consent of the company director. In practice, of course, because health and safety failures typically result from a chain of decisions rather than from one person's action, it is likely to remain the case that the prosecution of individuals for health and safety offences will be very infrequent. Nevertheless, I believe that the courts are right to call for the availability of the penalty of imprisonment for the most serious offences.
	The second reason for higher penalties is for more effective deterrence. If we are to deter irresponsible behaviour and encourage compliance with the law, penalties need to be high enough to eliminate the gain from breaking the law. Philip Hampton puts the general principle, and this is the message to good businesses, which are of course in the majority:
	"Illegal operators have incentives to undercut honest businesses, partly because penalties are low absolutely, but more worryingly because penalties imposed often do not reflect the commercial advantage a business has gained from non-compliance".
	Hampton had no doubt about the inadequacy of the penalties under the 1974 Act. He said:
	"In 2003-04, the Health and Safety Executive prosecuted 1,756 cases, with an average fine on conviction of £4,036 in magistrates' courts, and £33,036 in Crown Courts. The deterrent effect of such fines is likely to be low. For any company other than the smallest, a £5,000 fine is likely to be an insignificant sum".
	That is why Recommendation 6 of the Hampton review was that maximum fines in the magistrates' court should be increased and Recommendation 7 was that fine levels should take account of the economic benefit gained. The Bill will implement those recommendations.
	The third reason for these changes is the need for greater efficiency in the court system. There is little doubt that at present the lower courts will often refer the most serious cases, which they are otherwise quite competent to hear and judge, to the higher courts because they feel that they do not have adequate sentencing powers. Typically, that could cover cases taken under regulations governing asbestos, gas safety or construction. Consequently, court cases are delayed, court time is wasted and the more valuable time of the higher courts is used up unnecessarily. By extending the £20,000 maximum fine to the lower courts and making imprisonment an option, more cases will be resolved in the lower courts and justice will be administered more efficiently.
	The Bill had not only cross-party support in the Commons but widespread support for its principles from a range of people, including employer organisations, trade unions and professional bodies such as the Institution of Occupational Safety and Health and the Health and Safety Lawyers' Association. The support for the principles of the Bill is very welcome, but I know that there have been some concerns about the option of imprisonment, which the Bill extends. I hope that I can offer some reassurance.
	First, imprisonment is widely available under other regulatory legislation, including the Environmental Protection Act 1990, the Food Safety Act 1990 and the Water Resources Act 1991. It is helpful to note that these arrangements seem to have worked well, without objection, for many years. More importantly, I should highlight the strict guidelines which are observed by the regulators in their approach to the prosecution of health and safety offences. The document which they work to is the Health and SafetyCommission's Enforcement Policy Statement. Paragraph 39, which I recommend to anyone in doubt about this, makes it clear that prosecutions should be in the public interest and where one or more of a list of circumstances apply. These include where,
	"death was a result of a breach of the legislation ... there has been reckless disregard of health and safety requirements ... there have been repeated breaches which give rise to significant risk, or persistent and significant poor compliance ... false information has been supplied wilfully, or there has been intent to deceive in relation to a matter which gives rise to significant risk".
	These are very strict considerations about very serious matters. Prosecutions are not undertaken lightly.
	However, I recognise the concern that has been expressed about the extension of the option of imprisonment. My right honourable friend Keith Hill recently approached the Sentencing Guidelines Council with a view to its issuing fresh guidelines to the courts in response to the Bill's provisions. The Sentencing Guidelines Council has responded positively, indicating that it has identified these offences for inclusion in its work programme and will review that programme in the event of the Bill becoming law.
	Now to the Bill's provisions; it will, as the Long Title states:
	"Revise the mode of trial and maximum penalties applicable to certain offences relating to health and safety".
	The Bill comprises three clauses and four schedules; this is the technical bit, but it will not take a moment. Clause 1 brings in Schedules 1 and 2, which respectively replace the penalty provisions of subsections (1A) to (4) of Section 33 of the Health and Safety at Work etc. Act 1974 and paragraphs (1A) to (5) of the Health and Safety at Work (Northern Ireland) Order 1978. The schedules also set out the mode of trial and maximum penalties for the health and safety offences listed in the 1974 Act and paragraphs of the 1978 order. Clause 2 introduces Schedules 3 and 4, which deal with consequential amendments and repeals respectively.
	We always try to follow the principle of conveying to the House anything we know which is relevant, even if it is not yet official. In that respect, I understand that the Delegated Powers and Regulatory Reform Committee will publish its comments on Clauses 2(2) to 2(6) next week, and some change may be necessary in Committee. I fully recognise the crucial nature of the work of the Delegated Powers and Regulatory Reform Committee, but I am absolutely confident that we shall be able to satisfy it on those provisions.
	Clause 3 sets out the Short Title, commencement and extent of the Bill. As the Explanatory Notes and other notes indicate, the Bill has no significant implications for public expenditure—it would not dare to do that at the moment—or public sector manpower. It creates no new regulatory requirements, and no new compliance costs arise for those obeying the law. However, the Bill engages with the European Convention on Human Rights, which I shall mention briefly in a moment.
	I turn to the changes set out in Schedules 1 and 2. The schedules list the new proposed penalties at each level of court hearing. They set out three changes to the present arrangements. First, they raise the maximum fine that may be imposed in the lower courts to £20,000 for most health and safety offences. The higher court fines remain unlimited. At present, the lower courts are able to fine up to a maximum of £20,000 for breaches of general duties to safeguard people's health and safety. The current maximum penalty for specific breaches is a £5,000 fine, but such breaches may be just as serious as breaches of general duties. Specific breaches include, for example, those of asbestos and construction regulations. The Bill would extend the £20,000 lower court maximum to offences that typically have created risk directly or indirectly, or actual injury, damage to health or death. The £20,000 maximum is extended also to offences, for example, that undermine the ability of enforcers to investigate what may be serious health and safety offences.
	The second change to present arrangements is set out in the schedules and would make imprisonment an option for most health and safety offences in both the lower and the higher courts. At present, imprisonment is an option only in certain cases. In the lower courts, it is an option only for failure to comply with an improvement or prohibition notice, or with a court remedy order, and for offshore offences. In the higher courts, it is an option only for failure to comply with licensing arrangements or explosives provisions, or disclosures in breach of the Act. Those are all serious offences. However, the Bill will extend the option of a custodial sentence to other offences; for example, where the illegal removal of asbestos has exposed people to serious risk. It is my expectation that imprisonment will continue to occur only in the most serious cases and that there will be only a minimal increase in the number of offenders going to prison, which currently is three or four a year.
	The third change to present arrangements would make two offences which are currently triable only in the lower courts either-way offences, like most health and safety offences, so that they would be triable in either the lower or the higher courts. These offences are, first, under Section 20 of the Act, the contravening of any requirement imposed by an inspector—for example, to give information for an investigation or to leave premises undisturbed after an incident—and, secondly, preventing another person appearing before an inspector or answering his or her questions. Under the Bill, those offences can in future attract the tougher penalties available in the higher courts.
	Finally, I shall say a word on the Bill's engagement with the European Convention on Human Rights. The courts have already held that the burden imposed by Section 40 of the 1974 Act is compatible with the convention. The question is whether the Bill increases the likelihood of a successful European Convention on Human Rights challenge by introducing the option of imprisonment for an offence to which the reverse burden of proof applies. My advice is that such a provision can be compatible with Article 6.2 of the convention if it is justified on the basis that is reasonable and proportionate and does no more than is absolutely necessary to accomplish the aims of the statute. Those points are made in paragraphs 20 and 21 of the Explanatory Notes, and I know that my noble friend Lord McKenzie will address the matter in his speech a little later.
	The United Kingdom is a world leader in health and safety, but we must always strive to do better. Last year, employees in Britain suffered nearly 230 work-related deaths, nearly 30,000 major injuries and well over 100,000 lesser injuries that kept them off work. Of course, it is not only employees whom the legislation seeks to protect but members of the public who suffer death or injury at workplaces. In 2006-07, more than 120 members of the general public were killed, and nearly 17,500 reported injuries. I hope that this short Bill will play its part in our striving to do better. Its purposes are clear: to punish the criminally negligent who put life and limb in danger in the workplace, to deter those who are tempted to cut costs by breaking the health and safety law, and to render faster and more efficient justice. The Bill seeks to do all this with no new regulatory requirements or new compliance costs in any sector, and I commend it to the House.
	Moved, That the Bill be now read a second time.—(Lord Grocott.)

The Earl of Mar and Kellie: My Lords, it is always difficult to be seen as criticising health and safety at work or anywhere else, but the Bill raises some questions. I am mindful of the 20th anniversary of the Piper Alpha disaster and the start of the plastics factory disaster inquiry in Maryhill in Glasgow.
	The noble Lord, Lord Grocott, has brought forward this challenging Bill and explained it well. In this short intervention, I shall raise seven points in the Bill which I do not fully understand, or at least did not do so before I heard the noble Lord's explanation.
	First, the Bill seems to be a hybrid between regulatory and criminal legislation. That may not necessarily be a bad thing. Secondly, the Bill proposes the use of a reverse burden of proof; that is, guilty until proved innocent. I have read that this reverse burden of proof has up till now been used only for regulatory rather than criminal offences. Thirdly, the Bill allows for the imprisonment of the body corporate, but it is not at all clear about how the human representatives of the body corporate will be chosen. How will they be selected? This reminds me of the wretched whipping boy supplied to take the punishment of the youthful King James VI in George Buchanan's schoolroom. Fourthly, I can see considerable impact on minute-takers and pressure on them after each meeting to establish and record who had reservations about each corporate decision. Fifthly, is there not a better reality for corporate imprisonment? Rather than directors or senior staff being imprisoned, is not corporate loss of liberty in fact suspension from trading? Does the Bill not attempt to dismantle the concept of a separate legal persona for businesses? Sixthly, Network Rail has suggested amendments which reduce the imprisonable to those who are personally and identifiably guilty. Seventhly, Network Rail also points out that, without such clarification, someone who had not attended the trial could be imprisoned—a sort of contracted blame-taker.
	Will the Government support the Bill? I look forward to hearing that my worries about it are ill founded. At this moment, I fear that it will promote risk aversion.

Lord Berkeley: My Lords, I congratulate my noble friend Lord Grocott on moving the Bill, because it is an important addition to health and safety at work legislation and to the Corporate Manslaughter Act that we debated a year or two ago. I also congratulate my right honourable friend Keith Hill, who, in addition to starting this Bill in the other place, has the undying gratitude of the whole rail freight industry—I am chairman of the Rail Freight Group—for introducing an amendment to the Railways Act 1993, which was the privatisation Act, stating that the Government and the regulator had a duty to promote freight as well as passengers. He deserved a lot of credit for that. This Bill is a good sequel to that legislation because it affects the railways. However, it affects many other parts of industry as well. I certainly agree with my noble friend, who said that the penalties should be seen to be changing behaviour and should be a deterrent. It is the usual story that those who do it right have nothing to fear and those who do not need to be dealt with.
	I have two issues to discuss. First, there is the issue of the Health and Safety Executive treating all industries fairly. The other is the issue of the corporate manslaughter issue that the noble Earl, Lord Mar and Kellie, raised. It is essential that the HSE is seen to treat all industries equally across modes, be they roads, railways, the building industry, ports, or offshore oil. It is disappointing in some ways that the maritime sector is not covered, so that terrible accident involving the "Bowbelle" is not part of the HSE's remit. Whether it should be is not something for this Bill.
	One issue that worries me is that the railways are still seen to be a high-risk industry, along with offshore oil and a few others, whereas the roads are not. My noble friend in his excellent opening remarks cited 230 work-related deaths, in which the HSE had been involved in prosecutions, and 120 other members of the public who had died. That figure is much too high, although, as he said, it is probably lower than in many other member states; but you can then compare that with around 3,000 road deaths every year. I know that the number is coming down, which is a great tribute to our colleagues in the Department for Transport, but 3,000 is still very high. A significant proportion of those deaths are defined as being "at work". Of course, the road maintenance and construction people are clearly at work, but a large proportion of drivers are at work. Whether it is 30 per cent or 40 per cent we can debate, but certainly most heavy-goods vehicle drivers and white van drivers are at work.
	In recent years, the HSE has made more effort to prosecute people and companies that allow their employees to work particularly long hours, and I hope that that will continue. Even 25 per cent of the 3,000 road deaths each year is still a great deal higher than the figures that my noble friend quoted in other industries. It is very important, from the public perception angle, that the HSE really has a go at roads fatalities. I know, as a result of previous debates that we have had here, that the usual explanation for not doing more has been that it is up to the police. Then one finds that it is not a primary duty of the police to do this, so the consequence is that nobody does it. That is a great shame. I hope that my noble friend the Minister can give me some comfort that this will continue to change. It has changed—that has started—but there is still quite a long way to go.
	The other issue is corporate manslaughter and going to jail. As the noble Earl, Lord Mar and Kellie, said, it is difficult to send a company to jail. I am not sure where we ended up with the corporate manslaughter debate and whether government agencies are included in the provisions. Whether Highways Agency directors would go to jail if they did something that justified a prosecution is an interesting idea. As a colleague said to me before this debate, it would be even more surprising if the Prison Service was convicted and went to its own jails, which I am sure is unlikely to happen, because somebody would arrange for it not to happen.
	It is equally important for the private sector. Who goes to jail if there is a conviction for a corporate manslaughter is an issue in this Bill. My noble friend indicated that this probably would not happen because an individual would probably be prosecuted on his or her own as well. That is not how I and a few others have read this Bill, but we may have got it wrong. It is terribly important that, if any company or organisation is convicted under one of the clauses that carries a jail sentence, we do not get into a situation in which it is a person at a very low level who goes to jail and the directors get off because they say that they were not around. That would be highly unsatisfactory. The only answer is to ensure that, if a jail sentence is deemed necessary and appropriate, it should apply to an individual who has been charged on the evidence presented. I very much look forward to my noble friend's responses on those issues.

Lord Addington: My Lords, this is a comparatively modest Bill. First, if you do not happen to be familiar with the area and you look at it for the first time, you think, "What does it mean?". Secondly, you ask yourself, "Am I going to be interested?". The answer will probably be no. But it falls to me today to cover this subject.
	The basic principle that fines are too low is one that we do not have a problem with. For very serious offences that engender life and limb, the existing structure means that you face inappropriate levels of fine. The problem, as my noble friend suggested, is that you then come into the area of the reverse burden of proof. Once again, that is a subject to which I had not paid a great deal of attention, but it was explained to me that it is when you have to prove that you have not committed an offence. I am sorry to explain it in such basic terms, but that is the level at which I am operating in this situation. You can be sent to prison not because you were proved to do something but because you have not proved that you did not do it. That is the area of concern, as it seems to me.
	In addition, as the noble Lord, Lord Berkeley, has just pointed out, there is the question of where the buck stops in an organisation. Both those questions are ones to which we need a good, clear answer. Where is the process of precedent that is expected to be established or has been established? Please can it be pointed out to us, so we can make sure that we know exactly what we are dealing with—and that the business community knows exactly what it is dealing with—in this process? Then you will know the positive benefits of what will happen if something goes wrong. This is about punishment with regard to risk-taking and risk aversion. It does not really matter what penalty you have if you do not enforce it properly; let us not forget that, for a start. In what part of the process will you intervene and who will take responsibility? As the noble Lord, Lord Berkeley, said, who in the chain of command will be in the position to say, "No, we will not do that; we will not cut that corner."? Where does that happen? What is the legal process behind that, and how do the two interact?
	That is the major concern, as my noble friend pointed out. He talked about the consequences of being risk-averse and how that could slow down the process of taking decisions on an engineering project, or any activity. If that is not clear, it could have great negative impact. Health and safety is always criticised for that. To be perfectly fair, everybody is against health and safety regulation until it is their little Johnny on the ladder. I fully appreciate that. People think that it is a silly regulation until it is "me or mine" who is at risk or has been hurt. So we must try to get as much balance as we can with this and address it properly. What is the process and what is the framework?
	My noble friend mentioned that things can go horribly wrong. Piper Alpha will always be on my mind. It was a very odd day for me. I was in Aberdeen, graduating from university. All of us at the university had big smiles on our faces, but all those involved in the offshore industry there were going round with looks of panic and fear because they were worried about their colleagues—and, indeed, many of them had lost people. It can go horribly wrong.
	Those in the train industry pointed out—I think this is where much of the objection is coming from—that with public transport disasters there seems to be a suggestion that anybody could have been there: that there is the fear that it could have been any one of us. The press seem to pick up on this and go for people in organisations, people who may not have any opportunity to stop what is going on. So clarification is very necessary to make sure that the legislation does what is intended—the noble Lord, Lord Grocott, has been absolutely clear about the intention—and makes sure that those at the right point feel a greater obligation if something goes wrong and pressure is applied to them
	So clarification of existing laws and conventions, and how they interact, is required. If that cannot be given today, will the Minister make sure that all those who are going to speak and those interested in the debate know about it, so the legislation can proceed with greater clarity, at the very least.
	We have just heard that we will have the opportunity to make a small amendment or two. There may be a small one here, which I would suggest will not affect parliamentary time too much. I hope that everybody will be open to making sure that this Bill works properly and that it addresses the issues that need addressing. Once again, clarity and information is required now.

Lord Taylor of Holbeach: My Lords, I declare an interest as an employer of full-time and seasonal workers in my family's agricultural and horticultural business. I hope that I can assure noble Lords that we run an orderly ship; therefore, I am not as an employer fearful of legislation which imposes a tight regime on these matters.
	Along with other noble Lords, I welcome the Bill. I thank the noble Lord, Lord Grocott, for introducing it to the House. This is the sixth time the Bill has been introduced to Parliament. Since the Government clearly support it, it is extraordinary that these three clauses have not been put through in government time. I hope the usual channels will continue to find time because I hope this time it will successfully make its way on to the statute book.
	The Bill is desirable for many reasons. I understand the caveats of various noble Lords who have spoken, but I support it because the noble Lord, in presenting the Bill, gave the core case for it becoming law. I emphasise my pleasure at seeing a health and safety Bill that does not heap on regulatory burdens with little or no benefit to the public, but instead targets the truly irresponsible and negligent employers who put people in serious danger.
	The 2006 Macrory report, Regulatory Justice: Making sanctions effective, highlighted that effective deterrents, properly targeted, can benefit legitimate businesses by reducing the need for frequent and onerous investigations. I hope that the Government will take that report to heart and will seek to reduce the overall burden as a consequence of this Bill. I would like to think that the noble Lord, Lord Grocott, can give us any concrete examples of de-regulation or easing employer costs that he expects to happen. Indeed, the Minister might also be thinking in this way.
	There is also, as the noble Lord, Lord Grocott, said, the benefit to legitimate businesses of a level playing field. When the penalty is actually less than the cost of compliance, there is an economic advantage even for non-compliant employers, let alone for those who are not caught. Another report, by Philip Hampton, identified this problem in 2005, so I am pleased that this will finally be resolved.
	As I have mentioned, I have great hopes that this Bill will be properly targeted. Health and safety legislation will only work effectively if both the right person and the right behaviour are identified. The noble Earl, Lord Mar and Kellie, and the noble Lord, Lord Addington, were particularly concerned about that.
	I hope that the tight focus, identified by the noble Lord, Lord Grocott, in sentencing policy where imprisonment is concerned can be put in the Bill. There is a contrast between the sentences available to the courts, for which the Bill provides, and the sentencing guidelines which the noble Lord described. His emphasis in the guidelines was on wilful negligence, whereas the provision in the Bill is much wider.
	My honourable friend in another place, Mr Andrew Selous, raised a concern that the new penalties might fall on the wrong person. That resulted in reassurance about the care that courts and investigators would take in ensuring custodial sentences would only be applied to a person deserving of such a punishment. I hope the Minister will also be able to reassure me that similar care will be taken with financial penalties.
	Unfortunately, health and safety legislation over the past few years has proved to be a large and very blunt instrument when targeting dangerous behaviour. When even the Health and Safety Executive and the Royal Society for the Prevention of Accidents have spoken out about the stifling effect of layers and layers of risk-assessment and health and safety preventative measures now required for the most trivial of events, it is clear that something has gone wrong.
	Health and safety has now become a phrase considered synonymous among the wider public with overreaction, molly-coddling and a complete absence of common sense. We need to be able to address the issue. It is not surprising. Stories about village fêtes and school trips being cancelled frequently find their way into newspapers. Even those who fully understand the legislation think that such an effect is unnecessary. It is clear that none the less the perception is very much in existence.
	I am involved with a local charity event in Spalding involving a flower parade. The health and safety provisions have augmented over time. The costs involved are making some of these events prohibitively expensive. I believe that one of the elements of a firm sentencing process is to make it much easier to reduce the regulatory burden, putting the onus back on individuals to deal with these matters as a matter of common sense.
	What are the Government doing to improve the situation? This Bill will, quite rightly, raise the penalty for egregious behaviour, but it would be appalling to think of it as acting as a further deterrent on the sorts of events I have just mentioned. How will the Government ensure that the intention of this Bill is fully understood, not only by employers, who must be aware of the increasing penalties before it can be fully effective as a deterrent, but also on officials, who so often appear to give a misleading impression to the wider public about what is and what is not acceptable?
	Finally, I would like to raise a small query about the statistics on workplace injuries. A Written Answer from the Government in another place confirmed that fatal accidents involving at-work vehicles are only included in the annual Health and Safety Executive publication if they involve a specific road-side activity. I hope the Minister will be able to clarify this further. The noble Lord, Lord Berkeley, pointed out his concerns here. I appreciate that many fatalities involving vehicles may occur where neither the worker nor the employer is at fault, but that is equally true of accidents on site. Is it not the case that employers have equal responsibility to ensure that work vehicles are safe, just like any other company-owned equipment, and that employees are suitably trained and licensed to drive? I quote from my own experience. In my business we have protocols for drivers, not just commercial goods drivers but sales people and others who use company cars and their own cars for work. It is important that this attitude is more general and properly perceived as being part and parcel of health and safety, not just at work.
	I would not want to end my speech on an unduly negative note. Health and safety is about creating an attitude of mind. In the February 1974 general election, the good people of Chesterfield chose to return not me but the noble Lord, Lord Varley—greatly, I am sure, to the advantage of both another place and this House; I have been doing my best to make up for that since. In the long journey since the Act of that year, attitudes have changed. The noble Lord, Lord Grocott, pointed out how dramatically the figures have changed and how the record of health and safety is revealed in the statistics. The overwhelming number of employers and employees are aware of safety in the workplace in a way in which they were not when that Act came in. Peeling posters gummed to the factory or warehouse wall have been replaced by proper, proactive management.
	The Bill assists that process, and I hope that we can recognise that it also gives a chance to lift a regulatory burden that may not now be as necessary as once it was. I thank the noble Lord for introducing the Bill.

Lord McKenzie of Luton: My Lords, the Government very much welcome the introduction of the Bill by my noble friend Lord Grocott. I am delighted that he has decided to introduce and take forward these measures. I congratulate him on his comprehensive and detailed exposition of the terms and implications of the Bill. I also congratulate and thank the right honourable Member for Streatham, Keith Hill, for his skill and collaborative approach in successfully piloting the Bill through the Commons. He demonstrated a willingness to consult widely with a range of stakeholders, and to take on board the views and concerns of honourable Members. In short, his approach was exemplary.
	I am particularly pleased that there was strong cross-party consensus on the Bill in the other place. I place on record my thanks to the honourable Members for South West Bedfordshire, Andrew Selous, and Rochdale, Paul Rowen, for their proactive support. That has been reflected wholeheartedly by the Conservatives today—for which I thank the noble Lord, Lord Taylor—and, with some qualifications, by the noble Lord, Lord Addington.
	These proposals are entirely consistent with the Government's health and safety strategy and the wider consideration of regulatory sanctions outlined in both the Hampton and Macrory reports. The Government are satisfied that the HSE, local authorities and other health and safety regulators are doing all that they can to bring successful health and safety prosecutions. However, the courts are presently prevented from imposing adequate and realistic penalties in some of the most serious health and safety cases. I stress that the Bill does not add to or change any of the existing duties on employers or individuals, nor does it create any new offences. Rather, it provides for changes to the current penalties regime for health and safety offences which were last changed in 1992.
	The HSE and other regulators prosecute when it is proportionate to do so: when failures to comply with the law are serious and when serious risks are not prevented. That is in line with HSE policy and the enforcement principles supported by the Government, which were helpfully outlined by my noble friend Lord Grocott. The proportionate approach is evident in the fact that all of the HSE's activities—including inspections, of which there were some 60,000, and investigations—in 2006/07 resulted in it issuing 8,071 enforcement notices and 1,141 offences being prosecuted. The response to most breaches is advice and information. Nearly 80 per cent of the HSE's prosecutions were completed in the lower courts.
	Those cases which are brought to the courts represent the most serious breaches of health and safety legislation where people have been unacceptably exposed to risk of serious harm. However, the lower courts are presently prevented in some of these more serious health and safety cases from imposing adequate penalties. Consequently, cases are delayed and court time wasted, where the lower courts refer cases to the higher court that they are otherwise competent to hear but for which they feel they lack adequate sentencing powers. In addition, there are cases of serious breaches where, even in the higher courts, it is not possible to impose a custodial sentence except in limited circumstances. I illustrate this by reference to deaths from carbon monoxide poisoning caused by gas appliances and flues which had not been properly installed or maintained.
	In 2006, Judge Roger Scott criticised current health and safety legislation after he was forced to free a gas fitter who put customers at risk from deadly carbon monoxide fumes. Branding Paul Regan "dangerous", the judge said:
	"The family were put at risk of death by poisoning or explosion ... I wouldn't allow you within 150 miles of my house. You should go to prison for 18 months but as it is I can only fine you".
	The individual had admitted pretending to be a Corgi-registered fitter, carrying out work while not registered, and was fined £1,072 at Bradford Crown Court for four charges relating to the quality of work. This is clearly a situation that we must address, and the Bill does. The availability of stiffer sentences will strengthen the deterrent to others who might think that it is worth their while to continue to benefit from carrying out work that puts innocent people in danger.
	As my noble friend Lord Grocott explained earlier, the Bill will make imprisonment an option for the judiciary and the courts for a wider range of serious breaches of health and safety legislation. It will also help to address the mounting concern at the anti-deterrent effect of what many see as derisory penalties handed down by the courts. As my noble friend also said, as far back as 1998, the Court of Appeal identified that the general level of fines in health and safety cases was too low and gave examples of particular aggravating and mitigating factors which might be relevant when a court decided on a sentence. Aggravating factors included whether death resulted from the breach; whether the defendant failed to heed warnings, including, for example, previous HSE advice or action including improvement and prohibition notices; and whether the breach was deliberate with a view to profit or to save money.
	The Health and Safety Executive, local authorities and other health and safety regulators now ensure that the courts are made fully aware of these factors before sentencing, which has resulted in some improvements in the level of fines. However, health and safety fines are still generally lower than those imposed on companies by financial regulators for regulatory breaches and competition offences. It is important for social and economic reasons that breaches of financial and competition regulations are punished heavily, but it is also right that corporate health and safety crimes should attract more serious sanctions such as increased fines and, in the most serious cases, imprisonment. It is wrong that a relatively small number of businesses can gain a commercial advantage from putting the lives of their workers and members of the public at risk. Both the Hampton and Macrory reports recognise that the penalties handed down by the courts are not seen to reflect either the severity of the offence or the economic benefit a business has gained from its non-compliance.
	It is vital that the courts can reflect the growing condemnation that society reserves for businesses and individuals who profit or gain an advantage at the expense of other people's health and safety. Extending the availability of imprisonment to most health and safety offences is expected to lead to a small increase in those sent to jail for health and safety offences. However, the most important effect is expected to be more effective deterrence, especially in relation to directors and managers whose influence in securing good health and safety is critical.
	Of course, it is for the courts to decide the appropriate penalty for the health and safety offences brought before them. By extending the maximum fine available to the lower courts to £20,000 for most health and safety offences, and by making imprisonment an option, the Bill would give the courts full scope to exercise their discretion and judgment in health and safety cases. Allowing the lower courts to have a wider range of sentencing powers for health and safety offences will also reduce the need for cases to be referred to the higher courts for sentencing. This will speed up the resolution of such cases, improving the delivery of justice, and will reduce court costs for both the defendant and the regulator. It will also free up time in the higher courts, improving the efficiency of the justice system.
	The extra deterrent effect of higher fines when an organisation has failed to meet the proper standards of health and safety will also provide a further driver for ensuring safe working practices. It will achieve this by focusing attention on the importance of good, sensible health and safety management which protects people in the workplace and those who might be affected by work activity. The Bill supports the majority of businesses in this country that take health and safety seriously in tackling those that seek to gain a competitive advantage by cutting corners on health and safety.
	The noble Earl, Lord Mar and Kellie, my noble friend Lord Berkeley and the noble Lord, Lord Addington, referred to corporate bodies. There is no prospect of a company being sent to prison. That cannot apply if the only entity being prosecuted is the corporation. Therefore, issues around a corporation having to cease trading simply do not arise. I make it absolutely clear for the record that if the corporate body alone is the subject of the prosecution, and the prosecution is successful, individuals cannot be dragged into serving a prison sentence in lieu of the corporation. If individuals are prosecuted in their own right—overwhelmingly, prosecutions involve corporate bodies—a custodial sentence may be relevant in extremis. However, a successful prosecution against a company cannot drag in imprisonment for individuals. I hope that I have addressed that point.
	Some noble Lords referred to the Bill's engagement with the European Convention on Human Rights. This is a complex and detailed issue but one of crucial importance and I am grateful to have the opportunity to deal with it today. The convention point at issue is Article 6.2, which concerns the right to a fair trial and the presumption of innocence, and its relationship with Section 40 of the 1974 Act, which reverses the burden of proof on to the defendant when the offence is subject to the statutory qualification "so far as is reasonably practicable".
	The difficulty with any "reverse burden of proof" provision is that it is an inroad into the presumption of innocence enshrined in Article 6.2 of the convention. Section 40 of the 1974 Act was challenged in a prosecution conducted by the HSE in 2002 against a plant hire operator, David Janway Davies, for breach of Section 3(1) of the 1974 Act. The Court of Appeal ruled against Janway Davies, holding that the reverse legal burden of proof contained in Section 40 was compatible with the convention.
	The court's approach was to examine whether a fair balance had been struck between the fundamental right of the individual and the general interests of the community, it being for the state to justify an inroad into the presumption of innocence,
	"which should not be greater than is necessary, justified and proportionate".
	On the basis of this and other case law, the Government have looked carefully at the compatibility with human rights legislation. We consider that the proposals in the Bill, including the widened scope for custodial sentence, are reasonable and proportionate, and that Section 40 continues to represent a fair balance between the rights of the individual to a fair trial and the protection of life and limb from dangerous work practices. I should stress that, where Section 40 has an impact, there is first of all still an onus on the prosecution to show that there is a prima facie case, and the prosecutor would do so by referring to the reasonably practicable steps that an individual could have taken.
	My noble friend Lord Berkeley referred to the corporate manslaughter legislation. This concerns proceedings against corporations; it cannot be used against individuals. He also asked whether all industries were treated equally. They are, but I should point out that the maritime industry is covered by the Maritime and Coastguard Agency. He also referred to workplace transport, an issue about which he feels passionately. He is right to note that the police lead on the enforcement of road traffic legislation involving work-related road traffic accidents, for example where a sales rep has an accident while travelling between locations. However, the HSE will become involved in line with the work-related deaths protocol if the accident relates to a roadside work-related activity, for example construction. The HSE may also assist the police, and investigate, if wider issues arise from the management of work-related road safety.
	The noble Earl asked whether this was a hybrid Bill. The short answer to that is no. In the time available I shall not expand on that, but I am happy to write to him about it. The noble Lord, Lord Taylor, talked about deregulation. The Bill is not a deregulatory measure. However, the HSE has a better regulation framework, including reducing administrative burdens through reducing forms, providing sample risk assessments and bringing together sets of regulations, for example on construction. He also referred to myths. That is an important point because many of the stories recorded in the press, which are accepted as true, are no more than myths. The HSE has a very good "myth of the month" programme, which seeks to rebut these stories. Sometimes a regulator may be overexuberant and sometimes people hide behind the label of health and safety because they do not want to do something and it is easy to use it as an excuse. However, it is important that the wider health and safety community continues to rebut those myths because they cut away at what we need to do, which is to change hearts and minds about the importance of health and safety.
	The noble Lord, Lord Taylor, also mentioned financial penalties. If a company is prosecuted, it will pay the fine. If an individual is prosecuted, that individual could be fined. The noble Lord, Lord Addington, asked about interventions. This depends on the circumstances. However, he raises important issues of governance. These are not prescribed by legislation; this is about directors showing leadership on health and safety matters. The noble Lord said that people recognise health and safety only when it affects them directly. That is part of the challenge we need to take up to ensure that there is wider acceptance that health and safety legislation is a fundamental part of a civilised society. The 1974 Act has done much to help achieve that, but it is incumbent on us all to continue to send out that message.
	The Bill proposes a modest change to the Health and Safety at Work etc. Act 1974 and the Health and Safety at Work (Northern Ireland) Order 1978, both of which are widely accepted as huge steps forward and path-breaking measures not just in this country but in many others. As my noble friend said, this has the support of many stakeholders, including the Health and Safety Executive, the Health and Safety Executive for Northern Ireland, trade unions, industry, professional bodies and the public. The Government welcome the Bill. I again thank my noble friend and others for their hard work in bringing it this far.

Lord Grocott: My Lords, I said in my opening speech, and meant it, that it was a pleasure for me to introduce the Bill in this House. That pleasure was reinforced by the contributions that we have heard. It was particularly reinforced by the fact that my noble friend on the Front Bench answered most of the difficult questions. This is a terrific arrangement: I introduce the Bill, and he answers the tricky questions.
	I agree with most of the comments made. It was reassuring to receive support for the Bill's principles from everyone who contributed. I know where the noble Earl, Lord Mar and Kellie, and my noble friend Lord Berkeley are coming from, as they share my enthusiasm for the rail industry. I could not agree more with my noble friend's comment that the railways get a very unfair press, particularly in relation to road transport. I declare an interest, in coming from at least three generations of railwaymen. Frustration is felt by employees in the railway industry, the vast majority of whom work phenomenally hard, including those whose front-line job is concerned with health and safety, those in signalling departments and others. It is grossly unfair to suggest that they are doing anything other than an extremely good job, and the overall record of safety on the railway proves that.
	I found myself wanting to say, "Hear, hear", to the noble Lord, Lord Addington. He pleaded—which is how I felt two or three weeks ago when I picked this up—the absolute need for clarity in the legislative work that we do. I hope that, in the expositions that my noble friend and I have given, we have clarified some of the technicalities in the Bill.
	I had a sense that I might have one or two things in common with the noble Lord, Lord Taylor of Holbeach; I had not realised that parliamentary failure was one of them. I greatly enjoyed his contribution. He made the crucial point, which was valuable to hear from him as a businessman, that good businesses have absolutely nothing to fear from this legislation. It is the bad businesses that have things to worry about. I emphatically agree that, at the end of the day, we are looking for the right kind of culture, applied with that great skill of common sense. The most valued characteristic of all legislators is a good dose of common sense. You cannot get a degree in it but, my word, it is useful to have when we try to put through legislation. I am grateful for the support that I have received.
	On Question, Bill read a second time, and committed to a Committee of the Whole House.

Immigration (Discharged Gurkhas) Bill [HL]

Lord Lee of Trafford: My Lords, I beg to move that this Bill be now read a second time.
	I am most appreciative of the opportunity to introduce this Bill today. In essence, the purpose of the Bill is to amend the Immigration Rules in connection with the requirements for indefinite leave to enter and remain in the United Kingdom as a Gurkha discharged from the British Army.
	In 2004, the Government changed the Immigration Rules to allow Gurkhas with at least four years of service to remain in the UK after their discharge from the British Army. Prior to that change in the rules, Gurkhas could not be granted indefinite leave to remain after their discharge. However, the new rules apply only to Gurkhas discharged from the British Army on or after 1 July 1997. The Bill would enable Gurkhas who left service prior to 1997 to be granted indefinite leave to enter and remain in the United Kingdom.
	For almost 200 years, Nepalese Gurkha soldiers have been part of the British Army, although the Gurkha brigade itself was formed only following the partition of India in 1947. More than 200,000 Gurkhas fought in the Allied cause in two world wars and 43,000 gave their lives. They have been deployed over the years in Malaysia, Borneo, the Falklands, the first Gulf War, Sierra Leone, Kosovo, Bosnia and currently in Afghanistan. With their motto, "Better to die than be a coward", they have won 26 Victoria Crosses. Currently, there are 3,400 Gurkhas in the United Kingdom forces, 700 of whom are at present in Brunei. Given that record of service to our country, their bravery, dedication and unswerving loyalty, they ask only two things: a decent, fair pension and a right of settlement in the United Kingdom, which is the purpose of the Bill. Surely those are not unreasonable requests.
	The Bill marks yet another attempt to get the Government to do the right thing. Over the years in both Houses, politicians of all political persuasions have pressed the Gurkhas' cause, with Questions and Early Day Motions. A number of parliamentarians have served with them. In your Lordships' House today, we hope to hear from the noble Viscount, Lord Slim, who served with the Gurkhas and who has a fine family history of service with the Gurkhas, the noble Lord, Lord Glentoran, who also served with the Gurkhas, and my noble friend Lord Burnett. I believe that the father of the noble Lord, Lord Bilimoria, served with the Gurkhas; no doubt many Gurkhas are customers of his at present, as am I. I hope that those noble Lords will all speak proudly in today's debate. We remember with affection our former colleague Richard Holme, Lord Holme of Cheltenham, who served as a lieutenant in the 10th Gurkha Rifles in Malaya in the 1950s. He would surely have participated today had he lived.
	My fellow Liberal Democrat, Bob Russell, introduced a Ten Minute Rule Bill in the other place as recently as May, which was designed to draw attention to the cause that I am pursuing today. He concluded as follows:
	"A few weeks ago, outside Parliament, I and some other Members witnessed 50 retired Gurkhas handing in their long service and good conduct medals in protest at the way in which they are being treated. There was extensive coverage of the event in newspapers and on television. The sight of such loyal, brave and dignified people being pushed to such a desperate act filled me with shame".—[Official Report, Commons, 7/5/08; col. 720.]
	Philip Johnston, writing in the Daily Telegraph, said:
	"There are times when the routine irritation we all feel with the idiocies that take place daily in government is supplanted by splenetic anger caused by something truly outlandish. The sight of Gurkha ex-servicemen gathered in front of the Palace of Westminster to return the medals they had received for fighting with the British Army was just such a moment".
	I turn now to the right of settlement. Prior to 1997, the Gurkhas had no right of settlement; each application was treated on its merits on a case-by-case basis. Following the handover of Hong Kong to China on 1 July 1997, the Gurkhas then based in Hong Kong were redeployed to the United Kingdom, apart from those who were deployed and based in Brunei. In 2004, it was announced that those Gurkhas leaving the Armed Forces after 1997 would have a right of settlement in the United Kingdom. However, there was a window between October 2004 and October 2006 when any Gurkha could apply for settlement. During that window, 3,000 were granted settlement. The Government's logic in the 1997 demarcation, as I understand it—no doubt we will hear from the Minister a little bit later—is apparently that, post-1997, Gurkhas had a real tie to Britain, whereas before 1997 they did not, despite all their service to this country over so many years.
	The current position for them is no right of settlement but applications on a case-by-case basis, with applicants having to fulfil one of four criteria: three years' physical service in the United Kingdom; strong medical grounds of a chronic or long-term health condition that cannot be treated in Nepal; satisfactory evidence that one or more of the applicant's children is currently receiving full-time education in the United Kingdom; or most of the applicant's living, close family resident in the United Kingdom.
	It is estimated by the British Gurkha welfare association—I spoke to its chairman at 9 am to check my figures and assumptions—that 25,000 Gurkhas might have retired before 1997 who would be eligible for settlement in the United Kingdom were the Bill to be approved, of whom perhaps 10,000 would wish to come. Given the overall number who settle in our country each year from all over the globe, that would hardly appear a significant figure. They could easily be absorbed and many would bring skills to this country that we clearly have considerable need of. Today the Government have yet another opportunity to right a wrong—to do the right thing. I pray for a positive response.
	Moved, That the Bill be now read a second time.—(Lord Lee of Trafford.)

Lord Glentoran: My Lords, I speak in a personal capacity in support of the Bill and congratulate the noble Lord, Lord Lee of Trafford, on bringing it to the House. As he said, I have had some experience of working and serving with those wonderful people. I picked up the Bill only a few days ago but was amazed at some of the figures that I found and that he just told us about.
	The situation is an insult to the Gurkhas who are unable to come to this country voluntarily and straightforwardly—those who retired before 1997. I see no logic in it whatever. In fact, there is no logic in it. It is just a straight insult to a group of probably the most loyal, worthy and brave people who have ever served this nation. They have many VCs and, as the noble Lord said, have served for over 200 years all over the world; indeed, now they are serving in Afghanistan. They have not given us up, so why are we giving them up in this rather unpleasant and unnecessary way?
	When we look at the numbers concerned, the situation is extraordinary. As a percentage of total immigration figures or anything you like—choose any number from the national budget—what is the cost of accommodating 10,000 Gurkha families? Because they retired before 1997, it has to be a diminishing figure. That is the way life is; we get old and die and cost nothing when we are dead, pretty well. I simply do not follow the logic of the Government sticking with their position. I strongly support the amendments that the Bill will achieve to the 2004 provisions.

Viscount Slim: My Lords, I thank the noble Lord, Lord Lee of Trafford, for bringing the matter to your Lordships' attention. As he said, I had the privilege and honour of serving with Gurkhas, as did my father. As a small boy I was brought up as a Gurkha, really, until I was commissioned into the family regiment.
	We have to make certain that the Gurkhas in the British Army are kept within the military covenant. I said in a defence debate in your Lordships' House some time ago that I felt that the covenant had been broken. The Minister—the noble Baroness, Lady Taylor—refuted that, but I have felt for some time, although it might be getting a little better now, that all parliamentarians had rather ignored the military covenant and that it had been broken. I have yet to be satisfied that I was wrong. The Gurkhas' welfare within the covenant has to be looked after; Gurkhas have to be treated like any other soldiers in the British Army. Other nuances have to be noted in the context of Gurkhas within the British Army. Their pensions still have to be looked at once more and resolved.
	As the noble Lord, Lord Lee of Trafford, said, the Government's view is that Gurkhas in the old days never looked at living in Great Britain. They simply were not allowed to—it was not even countenanced—so that is a remarkably weak argument on the arbitrary date.
	Governments can change rulings and law. The right honourable Mr Tony Blair, when he was Prime Minister, bucked and changed the law on proper remuneration for those who had been Far East prisoners of war—some 10,000, rather like the number that we are talking about today. I cannot believe that the cost of that would be much different from the cost anticipated now. I always view with slight concern figures put out by the Government about costs these days. A pinch of salt is sometimes required to approach them; they seem maximised unnecessarily.
	People underestimate the value of the Gurkha as a citizen—he has much to offer. To start with, he is a man of integrity, compared with the immigrants whom we have allowed in from all sorts of places off the streets—the terrorists, the criminals and the mafia groups that have emerged in our country. We seem to like to have them, but we would be much happier if we had some loyal Gurkhas among us. Their skills are many. They are good farmers in harsh conditions. They are good at transportation. They are engineers. They are also entrepreneurs; some good little Gurkha businesses have been set up in this country, which are doing no harm at all—as opposed to some of the other people who have been let into our country.
	We should have a good look at the issue. I hope that we will no longer hear from the Minister's department that we cannot accept the Gurkha because he is not sufficiently British-inclined or knowledgeable about Britain. I consider that a complete insult. If a Gurkha is prepared to die for the people of this nation, he must know quite a lot about them. That argument is a bad move on the part of the immigration department. I hope that the noble Lord, Lord Lee of Trafford, and others might consider the odd amendment in Committee, because this case may have the backing of the whole of your Lordships' House and I believe that it would support such amendments.
	I hope that the Minister will not think that everything that I have said is bad news for him. Great strides have been made by the Government in the overall move to bring the Gurkha regiments of our Army into and within the military covenant. There have been great advances for Gurkhas, but this has not yet ended. I hope that the Minister might even go back and think again, so that perhaps he will have a different story when we reach Committee.

Lord Sheikh: My Lords, I begin by thanking the noble Lord, Lord Lee of Trafford, for introducing the Bill. The House needs to treat this Bill with an appropriate level of respect, for it raises an important subject which warrants very careful consideration. There is strong public sympathy for the first-class service offered by Gurkha soldiers to the causes for which we have fought in military conflicts for nearly 200 years. I have always admired the Gurkhas; I have read about them and met them.
	The Gurkhas have discharged highly praiseworthy service in the British Army since 1815 and are the only aliens to have been allowed to serve in our Army. As Nepal has never been a part of the Commonwealth, the Gurkhas' status has been unique. One measure of their contribution to our military cause is the number of Victoria Crosses they have won in that period. Gurkhas represent one of only three categories of non-United Kingdom nationals who have performed regular service in the British Army alongside citizens of the Commonwealth and the Republic of Ireland. Their service to our Armed Forces commenced after the conclusion of the Anglo-Nepali war when, under the terms of the peace settlement, large numbers of Gurkhas were permitted to volunteer for service in the British East India Company's army. The first Gurkha regiments were created from these volunteers.
	At the outbreak of the First World War, the whole of the Nepalese army was made available to the British Crown and around 1,000 Gurkhas enlisted in a number of locations. Some 40 battalions of Gurkhas served during the Second World War, amounting to around 112,000 men. Over the course of this 200-year history, around 300,000 Gurkhas have fought alongside British troops in military conflicts and earned the widest possible respect and honour from the British people. Nearly 45,000 have given their lives or been wounded in the discharge of these efforts. All of that gives a boost to their claim for settlement or citizenship in this country.
	Before 1947, Gurkha soldiers were enlisted only into the British Indian Army. In that year, a tripartite agreement between the United Kingdom, India and Nepal established the raw principles under which Gurkhas would serve. Under that agreement Gurkhas were recruited as Nepalese citizens, served as Nepalese citizens, and, at the completion of their duties, resettled as Nepalese citizens. The spirit of their service is demonstrated in their motto: "Better to die than live a coward". I have no hesitation in saluting their tremendous dedication and commitment to providing some of the best soldiers to have existed on the planet. There remains stiff competition for admission to the Brigade of Gurkhas, with around 23,000 applications for the 230 places available each year.
	Before the transfer of the headquarters of the Brigade of Gurkhas from Hong Kong to the United Kingdom on 1 July 1997, very few Gurkhas were present in this country. Before that, Gurkhas had no right to settle in the United Kingdom and it was assumed that they would retire in Nepal with a Gurkha pension. From 25 October 2004, the Immigration Rules were changed, and the Gurkhas who retired on or after 1 July 1997 were granted the right to apply to settle in the United Kingdom. That change meant that those who served post-1997 would be able upon discharge to settle in the United Kingdom provided they had completed four years of service. They would also be able to obtain citizenship after a further year. Those who do not meet those conditions can settle at the discretion of the Secretary of State for Home Affairs.
	There are around 22,000 pre-1997 Gurkha veterans, and a further 6,277 are serving or have served since 1997. There are currently 3,870 Gurkhas serving in the United Kingdom Armed Forces. I understand that only around 100 pre-1997 Gurkhas are estimated to be resident in the United Kingdom. As of March this year, there were only 61 applications for naturalisation outstanding from people who cited Nepal as their place of birth. The Government appear unable to provide further clarity about the precise number of Gurkhas among those applications without analysing each individual file.
	In 1997, the pay and pension arrangements for Gurkhas were improved and brought into line with those for the remainder of the British Army. There is understandable pressure to bring Gurkha pensions into parity with the remainder of the Army. We need to be cautious about how to address these claims. First, there is a strong convention that retrospective pension changes are not made within the public sector. Secondly, the pension arrangements for Gurkhas mirror those for the Indian Army, in accordance with the terms of the tripartite agreement, when it was presumed that Gurkhas would retire in Nepal under terms that were clear and explicit when these Gurkhas signed up for military service. The issue of retrospective parity for Gurkha pensions relating to service before 1997 has been considered and a judgment against the principle of retrospection has been delivered. A High Court ruling was made this week when a test case filed against the Government by three Gurkhas was lost.
	The terms of the Bill are limited to the Immigration Rules, although the issue of pay, conditions and pension rights are fundamental to the considerations. The noble Lord who introduced the Bill should provide greater clarity about how these issues are to be addressed; otherwise what will be the practical consequence for Gurkhas who are serving or have served under pay rates and pension rights that have been determined according to a Nepalese economic evaluation? Gurkhas were eligible for an index-linked pension after 15 years of service, so that it was possible for a Gurkha to receive a pension from the age of 33 and retain the ability to work. The standard qualification for a British soldier is 22 years—seven years more.
	The Government's changes to the pay and conditions for Gurkhas in March 2007 afforded Gurkhas the opportunity to transfer to other parts of the British Armed Forces and to transfer their pension arrangements from the existing Gurkha pension scheme to the principal Armed Forces pension scheme. That was a positive step.
	In the past few years we have witnessed a major change in the status and situation of Gurkhas. Transformed from a light infantry force based in Hong Kong, they are now based in this country and have been increasingly integrated into the military commitments of the wider British Army. We owe them a great debt of gratitude. They have a legitimate claim that the rules governing their immigration status in this country have not been appropriate.
	I am persuaded that there should be a review to determine whether the 1997 cut-off for citizenship established by the current Government is appropriate. However, there is some danger in identifying political groups and affording them treatment that is, by definition, denied to others. I hope the Government will be prepared to examine how we as a society might be more generous to all servicemen who are not United Kingdom citizens. Although I would like to see a proper review, my instinctive view is that Gurkhas should be able to apply for settlement in this country irrespective of the current cut-off date. I believe that they should be able to make these applications while serving and should not have to wait until discharge from the Brigade of Gurkhas. Equally, all those who are rewarded and decorated for gallantry in the course of military service should be treated on the basis of a presumption that settlement will be granted irrespective of length of service.
	This is a crucial issue that deserves to be considered in an atmosphere that is devoid of party political opportunism. In that regard, I believe that this House should reflect suitably on the issue, including the wider concerns about pension rights for Gurkhas and how the Immigration Rules apply to other non-UK nationals serving in the Armed Forces. These brave soldiers deserve nothing less.

Lord Bilimoria: My Lords, on the Friday before Remembrance Sunday every year, there is a ceremony at the Memorial Gates on Constitution Hill. The ceremony is to remember, honour and show our gratitude to the 5 million individuals from India, Pakistan, Bangladesh, Sri Lanka, Nepal, Africa and the Caribbean who served in both world wars. These gates exist thanks to the perseverance and tenacity of my noble friend Lady Flather, assisted by so many of my noble friends here, including my noble friend Lord Slim and the noble and gallant Lord—and field marshal—Lord Inge.
	I am proud to be the chairman of the commemoration committee of the Memorial Gates. Last year's ceremony was perhaps the most moving. We had Private Johnson Beharry VC there, the youngest VC holder. During the wreath-laying ceremony, the last person, at the end of the line of high commissioners and dignitaries, to lay his wreath was Tul Bahadur Pun VC, aged 87, one of the oldest living Victoria Cross holders. He got up but at the time he could barely see as he attempted to lay the wreath; however, two Queen's Gurkha orderlies who were smartly standing to attention rushed over and escorted this living legend and hero to lay his wreath. I do not think there was anyone present who was not moved. And there were many tears—tears of joy, tears of gratitude and tears of appreciation.
	On Remembrance Sunday, I was on duty as Her Majesty's representative Deputy Lieutenant for the London Borough of Hounslow. At that afternoon's wreath-laying ceremony, standing next to me, was Tul Bahadur Pun VC Sahib. Hounslow is the borough that he is based in. When I later heard that this individual—the bravest of the brave—had handed in many of his medals at Downing Street, including his MBE, as part of a demonstration to promote the rights of Gurkhas to stay in Britain, I was saddened and appalled. His protest came only days after he was refused treatment for a heart condition at an NHS hospital. He was told that he owed the hospital thousands of pounds in unpaid medical bills. Pun Sahib—one of only 10 Victoria Cross holders in the UK—was close to tears after he was humiliated at the cardiology ward at West Middlesex Hospital. He was originally refused entry to the UK by British officials in Nepal because he was thought not to have enough ties to the UK. Not enough ties to the UK, my Lords?
	I was privileged to have been born into the Gurkha family, as my father, the late Lieutenant-General Faridoon Bilimoria, was commissioned into the 2nd Battalion of the 5th Royal Gurkha Rifles, Frontier Force. I believe that when news of my birth reached my father, who was serving away from home, a holder of the Victoria Cross, Gaje Ghale VC, who was still serving at that time, was by my father's side. The story goes that when he heard the news of my birth—when the telegram arrived—he jumped for joy at the news, and the ground shook because he was such a large man.
	When my father later had the privilege of commanding the battalion, his subedar-major was none other than Agansing Rai VC. I was privileged to be brought up with these living legends. There was a third Victoria Cross holder—it was awarded posthumously—in my father's battalion in the Second World War, Netra Bahadur Thapa. In fact, my father's battalion was known as the VC battalion because it had won three Victoria Crosses in the Second World War. Two of the VCs were won within 24 hours of each other.
	When my father, before he retired, was General Officer Commanding-in-Chief of the Central Indian Army, he was also president of the Gurkha Brigade in India, and colonel of the 5th Gurkhas. I remember that in his office of the Central Army Command Headquarters, in Lucknow, there were two flags behind his desk: one the Central Army flag and, next to it, the 5th Gurkha regimental flag. I know which meant more to him.
	In India today, the Gurkha regiments that were left behind with the Indian army at independence have flourished; in fact, there are close to 100,000 Gurkhas serving in the Indian army. As the noble Lord, Lord Lee of Trafford, said, there are, sadly, just over 3,000 here in the UK, and the historic Gurkha regiments here have been merged into the Royal Gurkha Rifles.
	In India, the Gurkhas receive the same pensions as their fellow Indian army colleagues. In India, many Gurkhas, after retiring, have settled in India instead of retiring home to Nepal and are allowed to do so. Here, sadly—after a huge struggle—Gurkhas receive a pension but it is not equivalent to that of their fellow British soldiers. As we know, Gurkhas who retired before 1997 are not allowed to stay in the UK should they wish to do so.
	My noble and gallant friend Lord Walker, the former Chief of the Defence Staff and now the governor of the Royal Hospital Chelsea, where I am proud to be a commissioner, spoke in his maiden speech of the covenant that exists between the British people and the Armed Forces, as did my noble friend Lord Slim. Where is this covenant when it comes to the Gurkhas?
	Many people do not appreciate that the Armed Forces are referred to as "the services" because those who serve in them are serving their country—they are performing a service. In fact, the motto of the Royal Military Academy Sandhurst is, "Serve to lead". Where is the leadership in our treatment of the Gurkhas who have served our country with valour and dignity, when 43,000 young men lost their lives in both world wars, as the noble Lord, Lord Lee, said? Where is the leadership when the Chief of the General Staff, General Sir Richard Dannatt—a thoroughly decent and respected soldier, whom I have the privilege to know—highlighted the fact that a traffic warden gets paid more than a soldier? This is a chief of the Army staff who has the guts to speak up for his troops.
	Where is the leadership when our defence forces are stretched beyond all limits on a budget which, as a proportion of GDP, is half what it was 26 years ago, at the time of the Falklands conflict? Where is the leadership when the defence forces are humiliated and insulted by having a part-time Secretary of State for Defence, who also has the role of Secretary of State for Scotland?
	The covenant between the Government and our Armed Forces has been broken, and is shamefully broken every single day as our brave troops serve us loyally thousands of miles away. Where is this covenant with our Gurkhas, who have served this country for almost 200 years?
	When Bhanubhakta Gurung VC passed away earlier this year, I read his obituary and citation to my children and said to them, "This is not a story; this is not a movie script—this is bravery beyond compare". It is this bravery that has earned the Gurkhas their reputation worldwide as the finest, toughest and bravest soldiers, revered and respected in every corner of this earth. It is this bravery that has inspired us all.
	I commend the Bill and congratulate the noble Lord, Lord Lee, on correcting the injustice that exists. If someone who works for a corporation in the UK can stay for four years and then have the right to permanent residency, and thereafter the possibility of citizenship, there is no way that the brave Gurkhas who have served the country with unquestioning loyalty for four years, regardless of whether that service was abroad or here, should be prevented from remaining in this country, should they choose to do so.
	I am confident that if the opinion of the British people were sought, their famous sense of fair play and justice would show an overwhelming wish for these brave and noble soldiers to be allowed to live in this country. I challenge the Government to conduct such a survey, act on its results and enact this Bill.
	At the 150th anniversary of the 5th Royal Gurkha Rifles, Frontier Force, at the Royal Military Academy Sandhurst last month, as a proud member of the regimental association, I heard a prayer written by the Reverend Guy Cornwall-Jones, whose father served in the 5th Gurkhas:
	"Oh God, who in the Gurkhas has given us a people exceptional in courage and devotion, resplendent in their cheerfulness, we who owe them so much ask your special blessing on them, their families and their land. Grant us thy grace to be faithful to them as they have been faithful to others".

Lord Burnett: My Lords, I congratulate my noble friend Lord Lee of Trafford and thank him for introducing this excellent Bill, which I—and I am sure most, if not all—noble Lords will wholeheartedly support.
	Our military ties with the Gurkhas go back centuries, and during that time Gurkha troops have shown the greatest courage and loyalty to this country. It is interesting to remember how interwoven the Gurkha regiments are in the fabric of our British military history and culture. The moving speech of the noble Lord, Lord Bilimoria, is testament to that.
	In 1995, I was canvassing in the small village of South Tawton, near Okehampton, in what was my constituency. I knocked at an attractive house and a very smart couple came to the door. I recognised the man and noticed through the corner of my eye various Gurkha—or should I say "Goorkha"?—photographs and memorabilia. I was privileged to be calling on the late Colonel Nick Neill and his charming wife, Margaret. Incidentally, I found out recently that he is a close relation of the noble Lord, Lord Neill of Bladen.
	I was part of the advance party of 42 Commando Royal Marines and we took over the Lundu area of Borneo from Colonel Neill's battalion, the 2/2 King Edward VII's Own Gurkha Rifles, or Sirmoor Rifles, sometimes known as God's own Gurkhas. It was my privilege to have him as my commanding officer, albeit for only about two or three weeks. Margaret Neill's father and two of her brothers were 6th Gurkhas. Colonel Neill's career is a reminder—if one is needed—of the wonderful, brave and courageous service that the Gurkhas have given during and since World War II. He won a Military Cross in 1944 and in 1945 he was a company commander at Arakan during some of the fiercest fighting in the Burma campaign. One of his company, Bhanubhakta Gurung, who died recently and to whom the noble Lord, Lord Bilimoria, referred, won, I believe, the last Gurkha Victoria Cross awarded in World War II. The House will recall that Rambahadur Limbu, a 10th Gurkha, won the Victoria Cross in Borneo in the mid-1960s.
	Colonel Neill spent 10 years with his battalion jungle-fighting in the Malay emergency and commanded his battalion on a series of tours during the confrontation in Borneo. He then went on to command the Gurkha Depot at Sungei Patani. The Malay emergency and the Borneo confrontation even today serve as textbook examples as to how successfully to prosecute these wars. General Petraeus, the eminent United States commander in Iraq, has been a keen student of both those campaigns. The Gurkhas were indispensable in both of them. They effectively ran the Jungle Warfare School; I was reminiscing with the noble Lord, Lord Ramsbotham, about our respective times as students at that establishment. The Gurkhas have continued to give gallant and committed service. They have fought in the Falklands; they are now in the Middle East; they fought in Sierra Leone; and they provide enormous strength to our foreign policy in the Far East in the work that they do in Brunei.
	The Bill gives rights of residence in the United Kingdom to Gurkhas who retired before 1997, and I strongly support it. The Government, to their credit, have done much to improve the terms and conditions of service for Gurkhas. I am proud that my right honourable friend in the other place, Mr Nick Clegg, raised this matter at Prime Minister's Questions on 25 June last. I believe that both Houses recognise that we owe the Gurkhas a debt of honour which we can never repay. The Bill, if passed, will go some way towards honouring that debt.

Baroness Hanham: My Lords, from the strength of the speeches that we have heard today, there can be no doubt that there is warm support for the Bill in this House. The noble Lord, Lord Lee of Trafford, is making a brave attempt to bring a conclusion to the ongoing battle to ensure that virtually all members of the Gurkha regiment who have fought with and served in the British Army since 1815 are able legally, if they wish, to remain in this country on their retirement from the Army.
	We have heard from speakers who have had intimate relationships with the Gurkhas and know them well. They know their loyalty to the Army and their fighting powers. We, too, acknowledge the enormous contribution that they and other non-UK nationals who have served in the British Armed Forces make, and have made, to this country. We acknowledge, too, that the relationship between the Gurkhas and the British Army is very special, and there is enormous loyalty from one side to the other.
	As other noble Lords have pointed out, the genesis of the Gurkhas' involvement with the British Army goes back to Victorian times, as it was from then that the Army had the right to enlist Nepalese soldiers into its ranks. Following the partition of India in 1947, four Gurkha regiments were transferred to the British Army. Some say "Gurkha" and some pronounce it "Goorkha" but I expect it is those who know them who say "Goorkha", so perhaps it would be impolite of me to do so. During the Second World War—I know that there had been more during other battles—more than 120,000 Gurkhas served with bravery, and their VCs are a testament to that. As has been mentioned, there was also severe loss of life among them. As other noble Lords have said, they now number about 3,500 in the British Army and their headquarters has been moved from Hong Kong to Kent.
	Since 1815, Gurkhas have largely been recruited from Nepal and have retained their Nepalese citizenship. As has been said by other noble Lords, that changed only in 2004 with the amendments made to the Immigration Rules to enable, from 1 July 1997, any discharged Gurkha to apply for indefinite leave to enter the UK if he had completed four years' service as a Gurkha with the British Army and was discharged from the British Army in Nepal on completion of service. However, in effect a seven-year backdating was built into the 2004 rules.
	Through the Bill, the noble Lord is seeking to enable any Gurkha to apply for leave to remain. We now hear that a very small number did not apply by the 1997 deadline. The only restriction is that they must have had four years' service in the Army and hold a valid United Kingdom entry clearance in this capacity.
	We welcome the recent improvements that have been made to the terms and conditions of Gurkhas and their eligibility for settlement. We note also the judgment made the day before yesterday about pensions. The changes that have been made are relatively recent. We believe that more time is required to assess their impact. There are, of course, others who are not UK citizens who have served in our forces. Perhaps we need to see whether we might be more generous to them.
	My party is committed, once back in office, to conduct a review to determine whether the 1997 cut-off is appropriate. That is as far as I can go today. It is not wholehearted support for the Bill, but it underlines the sentiments that we all feel for the Gurkhas in this country.

Lord Bassam of Brighton: My Lords, I have the difficult job of responding to the Second Reading debate of the Bill put forward by the noble Lord, Lord Lee, on a subject which, it is fair to reflect, has generated understandable emotion and passion and a central plea to the Government to review their current position.
	I have been tremendously impressed by all who have contributed to the debate. They know much more about the Gurkhas than I do. Most of them have an association of some longevity with the military prowess of the Gurkhas and all of them have spoken with compassion, understanding and some considerable knowledge of the history of the Gurkha regiments and their loyal commitment to the armed service of our nation.
	I welcome the opportunity to speak on the Bill. I recognise the sensitivity of the issues that it raises and I am grateful for the opportunity to discuss them. I shall make it plain at the outset, as has the noble Baroness, Lady Hanham, that this is not a Bill which the Government can support. That is not to say that I and the Government do not value the tremendous commitment, loyalty, bravery and courage of the Gurkhas who have served our nation over some 200 years.
	Immigration is one of the most important issues raised by the British public. The public want to see an immigration system which is effective and above all fair: attracting the right legal migrants to help our economy; taking tough action against those who come or stay illegally; and setting out a clear contract of rights and responsibilities for all. That is how people wish us to conduct our immigration system. As stated in the Home Office strategy, we want to ensure that migration benefits the United Kingdom. In doing so, we will take account of the economic benefits and the impact on services and communities. I am sure that the House would expect us to do no less. We, as a Government, will also ensure that we continue to act with compassion to control migration and settlement with sensitivity for particular individuals or groups of individuals where it is right to do so. That reflection frames our approach to this subject.
	The Government's position on Gurkhas has generated considerable debate and media interest—there is no doubt of that—and that debate has continued for some time. The public wish to know that the Gurkhas, after having served in the British Army for many years, are being treated fairly and honourably by our country. During the Indian rebellion of 1857, Gurkhas fought on the British side, and became part of the British Indian Army on its formation. A number of noble Lords have referred to that important time. Gurkhas saw active service in many theatres of conflict between 1857 and 1914. They fought on the British side in both the First and the Second World Wars. There is no doubt therefore that the Gurkhas have contributed significantly to the security of the United Kingdom and we should acknowledge and reward, and continue to do so, their loyal service in the British Army in an appropriate and fair manner.
	From the noble Lord, Lord Bilimoria, in particular, we have had a very moving address to the House on the history of loyalty and commitment from the Gurkha regiments to the British Army and the British people. I pay tribute to the noble Lord for the way in which he set out his arguments and brought to your Lordships' House his intimate knowledge, understanding and involvement from a family perspective of the Gurkha regiments.
	I return to the issue of fairness. I believe that the current arrangements are fair and that the Government have been reasonable in their treatment of former Gurkhas. They have kept faith with the terms on which they were engaged prior to July 1997. A number of noble Lords have congratulated the Government on their moves since that date.
	The noble Lord's Bill seeks to amend the immigration rule which relates to former Gurkhas who apply to settle here on the basis of their past service of at least four years in the British Army. Specifically, the noble Lord seeks to remove the requirement for a former Gurkha to have been discharged from service on or after 1 July 1997 in order for him to be eligible for settlement in the United Kingdom. The noble Lord also seeks to remove the requirement for the discharge to have occurred within the two years of the date of settlement application by a Gurkha.
	The Government entirely understand the noble Lord's wish to do the best for the Gurkhas, but it is essential that the House understands that the 1 July 1997 cut-off is not an arbitrary date in the settlement rules for former Gurkhas. I also ask the House to understand the need to put the Gurkha issue into the context of our wider immigration policy, as I have argued.
	From 1947 to 30 June 1997, Gurkhas serving in the Army were based and served almost exclusively in the Far East. They were invariably recruited in Nepal, served in the Far East and retired in Nepal. Their headquarters was in Malaya and then in Hong Kong, which was then a British dependent territory. They were discharged in Nepal after completing that service, with the expectation that they would resume their lives there. Those who completed their full engagement received an immediate entitlement to a pension there, usually when they were around 32 to 35 years-old. That gave them a good standard of life compared with other Nepalese citizens.
	It is important to add that Gurkhas have always served in distinct units, with their own command structure and use of their native language. That was so that they could retain their Nepalese links and return to Nepal after discharge to utilise the skills they had acquired in the Army. That has never been so for other foreign and Commonwealth soldiers, who in addition were recruited and discharged in the United Kingdom and always served alongside British soldiers.
	From 1971, Gurkhas began to spend tours of duty in the United Kingdom of up to two years. Then, on 1 July 1997, the Brigade of Gurkhas became UK-based, with headquarters here, following the United Kingdom's withdrawal from Hong Kong. This is extremely significant as it is only from this time that membership of the Brigade of Gurkhas would be likely to lead to an extended period of residence in the United Kingdom or to the development of the type of close physical or family ties to the UK which would normally justify a grant of settlement to applicants under the relevant immigration rules.
	On the immigration rules and immigration policy in general, the grant of settlement in the United Kingdom is normally linked to an extended period of residence here or to the presence of a close family tie. In October 2004, following a very detailed Home Office and Ministry of Defence policy review, the immigration rules were amended. That change meant that, from 25 October that year, Gurkhas who had completed at least four years' service in the British Army and who had been discharged in Nepal on or after 1 July 1997 have been able to apply for settlement here within two years of the date of discharge. Since April 2007, Gurkhas have had the option of discharge in Nepal or in the United Kingdom; their dependants are also able to apply for settlement in line with them.
	Those arrangements recognise that the pattern of service in the British Army for Gurkhas has changed over the past decade. In addition, Gurkhas who retired before 1 July 1997 can apply for settlement under discretionary arrangements where there are strong reasons why settlement here is appropriate, such as a significant period of residence in this country or the presence of a close family tie.
	Following the rule change, there was, as noble Lords have acknowledged today, a two-year transition period, which extended the policy to those Gurkhas who had arrived in the UK after discharge and had remained without permission. Those arrangements have enabled many former Gurkhas to regularise their position in the UK and discretion may continue to be exercised in granting settlement to former Gurkhas on a case-by-case basis.
	I should add, to further inform the House, that a consolidated appeal is due to be heard before the Asylum and Immigration Tribunal on 21 July relating to the issues underlying the Bill. A number of Gurkhas have appealed against refusals of entry clearance or indefinite leave to enter or remain and settle in the UK. A number of judicial reviews are outstanding. We argue that those cases will provide an opportunity for the fairness of the policy to be tested and it seems to us eminently reasonable and sensible to await the outcomes of those landmark cases.
	Noble Lords made a number of points in the debate and it is right that I should try to respond to some of them. The noble Lord, Lord Lee, questioned the issue of the insufficiency of ties to the United Kingdom and he argued that perhaps only 10,000 of the 25,000 Gurkhas might wish to settle here. The Government fully recognise the service contributed by former members of the Gurkha regiments, but the terms of their service and their pension entitlement have, we argue, been fully honoured by us. We think that the 1997 cut-off is reasonable and fair—noble Lords have credited us for that improvement on former government policy. We believe that it provides consistency with wider immigration policy where, as I have argued throughout, the settlement is normally linked to a period of extended residence in the UK under the Immigration Rules or to the presence of family ties. Any decision to do away with the 1997 cut-off would have to take into account the impact across government departments of the arrival of potentially as many as 40,000 former Gurkhas and their dependants, not least the extensive implications for our already stretched housing sector.
	The noble Lord, Lord Sheikh, referred to a particular case relating to Ministry of Defence pensions. He acknowledged that, earlier this week in the High Court, Mr Justice Ouseley ruled that the Government's application of the July 1997 cut-off date to pension enhancements for service in the Gurkhas after July 1997, after which there had been an expectation of retiring in the United Kingdom, was reasonable, rational and lawful. That is the approach that the Government want to proceed with. We think that Gurkhas, past and present, have benefited from decent terms and conditions, something that is perhaps evidenced by the intense competition that traditionally accompanies annual recruitment for the brigade. It is not uncommon to have 20,000 applicants competing for approximately 200 places. We think that we have the balance about right.
	I also want to respond to the important point made by the noble Viscount, Lord Slim, about putting at risk the military covenant, an issue also raised by the noble Lord, Lord Bilimoria. We regard the maintenance of the covenant between the Government, the Armed Forces and the British public as essential not only to those who serve but to the future health and integrity of our Armed Forces. No one should question that important commitment made by the British Government. I cannot accept that the Government's position on Gurkha pensions or settlement rights suggests in any way that the covenant is being compromised or jeopardised, as may have been suggested this morning.
	As has been acknowledged during the debate, there have been substantial improvements to the pay, conditions and pension entitlements of serving Gurkhas, bringing them into line with their Commonwealth and British counterparts in the Armed Forces generally. We have rightly been congratulated on that. As I explained, the July 1997 cut-off applied to those seeking settlement within the Immigration Rules. We believe that it is fair and rational. As we have made plain, and as the noble Baroness, Lady Hanham, recognised, there is scope for those Gurkhas who retired prior to 1 July 1997 to apply for settlement in the United Kingdom under the discretionary arrangements. The noble Lord, Lord Sheikh, gave us some details on numbers for that. However, it must be an evidence-based application.
	I am grateful to everyone who has contributed to the debate. As I explained at the outset, the Government are not minded to support the Bill. We owe the Gurkhas a debt of gratitude. We believe that they have been treated fairly in the application of the 1 July 1997 cut-off. No doubt the issue will continue to be raised and to exercise legislators. It is not an easy one to resolve—the noble Baroness, Lady Hanham, reflected on that, as did the noble Lord, Lord Sheikh. It is not simple or straightforward. We must retain the integrity and consistency of our application of immigration policy.
	I have a great deal of respect for the noble Lord, Lord Lee of Trafford, who argued his case well, and for all noble Lords who have contributed to the debate with understandable passion and commitment and with a sense of reverence for the Gurkhas. The Government do not demur from any of that. I am grateful to all noble Lords who have contributed and for the opportunity to set out the Government's case but, all those things being said, I have to oppose the Bill.

Lord Lee of Trafford: My Lords, I am grateful to all those who have participated in today's debate. We have had five deeply sincere Back-Bench speeches from all quarters of the House. The noble Lord, Lord Glentoran, rightly talked about the diminishing number of Gurkhas. I say to the Minister that the 40,000 figure is a red herring and nonsense. We heard the noble Viscount, Lord Slim, with his great reputation and stature, talking about the military covenant and the Gurkhas' value as citizens.
	We had the contribution of the noble Lord, Lord Sheikh, with his considerable admiration for the Gurkhas. He talked with his deep professional knowledge of the pensions issue, which I was not focusing on today, although it is important. I acknowledge some of the improvements that the Government have made in the pensions situation of some. We then had the most moving speech from the noble Lord, Lord Bilimoria, with his deep family involvement with the Gurkhas, questioning where the military covenant is when it comes to the Gurkhas. There was also, of course, the contribution of my friend and colleague, the noble Lord, Lord Burnett, who served with the Gurkhas in Burma—

Lord Sheikh: He is not that old.

Lord Lee of Trafford: I am sorry, in Borneo; he is still a youthful man. He talked about the Gurkhas as running the jungle warfare school there and the debt of honour that we owe them. At least the noble Baroness, Lady Hanham, speaking for the Official Opposition, promised us a review if the Conservative Party comes to power at the next election. That is some progress, and we are grateful for that.
	The Minister's contribution was somewhat disappointing. He could not have particularly enjoyed his role today. His speech was negative and defensive and had no support at all from any of his colleagues on the Back Benches. However, as he acknowledged, we will return to this issue again. It will not go away. We owe so much to the Gurkhas.
	In conclusion, I hope that the Bill will be considered again.
	On Question, Bill read a second time, and committed to a Committee of the Whole House.

Planning and Energy Bill

Baroness Hanham: My Lords, my noble friend Lord Hanningfield apologises that he cannot be here today, so it falls to me to beg to move that the House do now resolve itself into a Committee on the Bill.

Moved accordingly, and, on Question, Motion agreed to.
	House in Committee accordingly.
	[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Brougham and Vaux) in the Chair.]
	Clause 1 [Energy policies]:

Lord Bassam of Brighton: moved the amendment:
	Clause 1, page 1, line 15, after "authority" insert "under or by virtue of any other enactment (including an enactment passed after the day on which this Act is passed)"

Lord Bassam of Brighton: At Second Reading, I referred to the need to make a very minor technical amendment to this important and valuable Bill. The amendment is required to improve the clarity of the Bill and has been brought to our attention by the House of Lords Delegated Powers and Regulatory Reform Committee. As ever, I am grateful to it for its diligence on matters such as this, and I am confident that the Committee will agree that it is better to amend the Bill now so that it is watertight. It is unfortunate that such a minor amendment is required at this stage, especially when the Bill has cross-party support and no other amendments have been laid, but as ever we are where we are.
	We need to amend the Bill for the straightforward reason that the Delegated Powers and Regulatory Reform Committee considers that Clause 1(2)(a) could be said to create a new power to make regulations to set energy efficiency standards. There was no intention to create such a power in the Bill. The intention was to rely on regulation-making powers in other legislation. The government amendment therefore inserts,
	"under or by virtue of any other enactment (including an enactment passed after the day on which this Act is passed)".
	That clarifies the intention to refer to regulation-making powers in other legislation. It is the sole purpose of the amendment, which I am grateful for the opportunity to move. I beg to move.

Baroness Hanham: That is probably the shortest speech that the Minister has made in this House for a very long time. I shall be even briefer and say that we have no objection to the amendment.

On Question, amendment agreed to.
	Clause 1, as amended, agreed to.
	Clauses 2 and 3 agreed to.
	House resumed: Bill reported with an amendment.
	House adjourned at 12.25 pm.